Rangarajan: N Block to Sansad Marg?

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Triggering speculations of a series of last-mile changes in the government, Chakravarti Rangarajan has stepped down as chairman of the Prime Ministers Economic Advisory Council (EAC). Suresh Tendulkar, EAC member and chairman of the National Statistical Commission, will head the council now.

Rangarajan could be nominated to the Rajya Sabha to fill a vacancy caused by the death of Nirmala Deshpande last May. “I have sent the resignation and it has been accepted on August 5,” Rangarajan told FE while declining to give any reason for it.

Officials hinted that the EAC chairmans decision would ensure there are no questions asked about him holding an office of profit, as and when he becomes a Member of Parliament.

In recent times, the government has assigned Rangarajan to resolve several contentious issues, including special economic zones, oil prices, futures trading, prices of farm commodities, the commodities transaction tax and measures to check the economy from overheating.

Rangarajan, a noted economist, is considered a confidant of Prime Minister Manmohan Singh. Rangarajan was the Reserve Bank governor between 1992 and 1997, when the current PM was the finance minister. Rangarajan was the Governor of Andhra Pradesh till 2003.

Meanwhile, orders to appoint Tendulkar as the EAC chairman were issued on Thursday night. He would take charge later this month. “I have sought a clarification on whether I can continue as NSC chairman,” Tendulkar told FE , adding that he would decide on assuming charge thereafter.

Tendulkar, a former director at the Delhi School of Economics, was part of various expert groups, including the Advisory Committee on National Accounts, the first Disinvestment Commission and the Fifth Central Pay Commission. As NSC chairman, he is working on an overhaul of the Indian Statistical System, including the National Sample Survey Organisation, in order to spruce up the data used to make policy decisions.

The change of guard at the EAC is not expected to affect its working; EAC is scheduled to release its review of Outlook of Indian Economy for 2008-09 next week. Earlier this week, Rangarajan had said the GDP growth might moderate to 7.5% to 8% in the current fiscal and prices would cool down to about 8% by March 2009.